Costello audit: Swan seeks investigation but Newman unconcerned

Amy Remeikis and Mark Hawthorne

Deputy Prime Minister Wayne Swan has called for an investigation into potential conflicts of interest stemming from Peter Costello's ownership of a lobbyist firm and his role overseeing an audit of Queensland's finances.

But Premier Campbell Newman says he has “no concerns” about any potential conflict of interests between the head of the government's "independent" audit and his private business interests.

Mr Newman has labelled ruling out clients of Mr Costello's firm from any potential future asset sales a “ridiculous proposition” as “no decisions have been made” about the asset sales.

“This whole conflict of interest in this day and age has been thrown around in the most careless and silly way,” Mr Newman said.

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“This is what conflict of interest means – conflict of interest means that somebody is involved in a decision and gets a direct benefit and frankly that is not the case here and never will be the case here.”

Mr Newman said he could not say if Mr Costello declared ECG clients which may have interests in any potential asset sales or service outsourcing in the audit report and referred a question about the matter to the treasurer.

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Mr Nicholls did not directly answer the question, despite having it repeatedly put to him yesterday, both in parliament and by Fairfax Media.

Mr Nicholls also refused to answer who first suggested Mr Costello for the commission role.

Mr Costello is chairman of Queensland's Commission of Audit, which in a 28-page executive summary of its final report recommended that the Queensland government privatise its energy sector and outsource government services, including health.

Mr Costello's private lobbying company ECG (Epstein Costello Gazard) Advisory Solutions has, at the same time as the audit, been registered as a lobbyist for energy company SP AusNet, Primary Health Care, IT company ASG Group and Serco Asia Pacific on the federal government lobbyist register.

All could potentially benefit from the recommendations of the audit report.

It is also alleged that Mr Costello helped raise funds for the Liberal National Party ahead of the 2012 Queensland election. The Queensland government, Mr Costello and ECG strenuously deny this claim.

An invitation to the event, obtained by Fairfax Media, reveals that Mr Costello hosted a $1500 a head QForum breakfast in Melbourne, on December 15 2011, just months before the Queensland election.

Mr Nicholls, then shadow treasurer, was billed as the guest speaker.

In a statement ECG published on its website in response to questions from Fairfax Media, Mr Costello's business partner, David Gazard, suggested Fairfax reveal its source. He also said QForum was a club.

“There are political clubs all over Australia which charge membership fees and provide events for their members who pay the same membership fee whether they attend events or not,” Mr Gazard said.

A staff member at Queensland LNP headquarters directed questions about QForum to state director Brad Henderson. Calls to Mr Henderson, were not returned.

Mr Swan yesterday said "Queenslanders are the ones who'll suffer under Peter Costello and Tim Nicholls' plan to privatise public assets."

Penny Wong, Minister for Finance and Deregulation, said: "There are reports today in the media that a complaint was made to the Crime Misconduct Commission in Queensland which references Mr Costello.

"This does raise some questions, and these are questions for Premier Newman and Mr Costello. The first is: is there a conflict of interest and if so was it dealt with in the report, and disclosed in the report.

"And the second is whether ... clients could in fact benefit from the recommendations. I think these are legitimate questions for Mr Costello and Mr Newman."

ECG Advisory on Thursday rejected claims it represented companies that could benefit from the recommendations of its chairman and co-owner, Mr Costello.

In a statement, the company said: "ECG has no current business relationship with SP AusNet, Primary Health Care or ASG.

"These relationships concluded before the audit made its 28 February, 2013 recommendations. Serco is represented in Queensland by another firm."

The federal government ECG register did not list any of the companies in late April 2012, one month after Mr Costello's appointment.

The Queensland integrity commission records shows ASG Group Limited was added to the state's ECG Advisory Trust lobbyist register as a client in June 2012. Primary Health Care Limited was added in July 2012.

The Queensland Commission of Audit interim report, the only report from the commission to be made publicly available to date, outside of the executive summary of the final report, was released in June 2012.

The complaint to the CMC was made on January 24, 2013.

The Queensland government disclosed Mr Costello's co-ownership and chairmanship of ECG Advisory when he was first given the $3300 a day commission job in March last year.

ECG also stated: "Mr Costello was eminently qualified to do that audit as the person who commissioned the 1996 Commonwealth Audit – the forerunner of the Queensland Audit – and as Australia's longest serving Treasurer delivering 10 surplus budgets, and presiding over two sovereign upgrades for Australia to AAA."